Seeds for a harvest: Rick DeVos' investment fund looks
for ideas that can produce fruit quickly

Rick DeVos is helping the state's entrepreneur community $5,000 at a time with Start Garden. Each week the group
invests in two ideas submitted to its website.

Rick DeVos -- like his grandfather Richard DeVos, the co-founder of Amway Corp. -- is writing a new page in the entrepreneur playbook with Start Garden, a $15 million investment fund that has been investing small amounts in scores of business concepts in the hopes of growing Michigan's next big win.

Each week, Grand Rapids-based Start Garden invests in two ideas submitted to its website. Each idea gets a minimum of $5,000. One of the ideas is chosen by Start Garden team members, while the broader public, through votes on the StartGarden.com website, selects the other. Later rounds can be $25,000, $50,000, $100,000 and even $500,000.

"We invest small amounts in small teams to find out quickly whether they succeed or fail," DeVos said. "We're looking for ideas that can quickly gain traction. We provide front-end exposure for entrepreneurs.

"We have a bigger funnel at the top. We're closing the zero-to-$500,000 gap startups face in our region."

He said by investing just $5,000, Start Garden attracts ideas seeking validation, but doesn't attract proper startups. And by allowing the public to participate in the process, it opens the filter on deal flow by bringing in potential projects that might not typically get that validation.

"Start Garden also provides a validation for us of an entrepreneur's hustle," he said. "We encourage entrepreneurs to hit their networks to get people to vote for their project as well as talk about Start Garden.

"Anyone familiar with my past projects knows I enjoy getting the public involved with a vote. It's not just to find out what people like, it's because an idea has a much better chance of success when an entire community gets behind it."

Those checks -- from April 2012, when Start Garden was announced, until last Feb. 7 -- have gone to 85 projects, nearly all at the $5,000 level. Twenty-three have received additional rounds of financing. So far, Start Garden has invested $1.8 million in capital.

On the flip side, 38 projects have washed out -- acceptable losses for DeVos' philosophy of lean entrepreneurship, a philosophy he's trying to rekindle in a state once known for entrepreneurship.

In the 19th and 20th centuries, Michigan was a frontier state where entrepreneurs prospered, first in mining and lumber, then in finance and automobiles, DeVos said. Then Michigan became a corporate state, where entrepreneurship -- and the failure that often goes with it -- was frowned upon.

"Our industries consolidated into massive corporations," he said. "Michigan became more about the job and the dependability of large organizations and the paycheck. We let our entrepreneurial muscles atrophy.

"What we need to do now is get more comfortable with losses in Michigan. We need to see business failure quicker and see validation of the business idea quicker. We'll all be better off for it."

In January, Start Garden made its biggest investment to date, $500,000, in Blue Medora, which develops software for IBM Tivoli Monitoring and Oracle Enterprise Manager. Grand Angels, a regional group of angel investors, announced that 20 of its 44 members cumulatively invested another $750,000 in Blue Medora.

"There is no pattern in terms of business categories," Moore said. "All of the projects have strong entrepreneurs working in markets where there's a lot of room for growth. We look for great execution of the business idea. That often comes from the $5,000 experiment.

"However, when we fund an existing company at a higher level that has not run a $5,000 experiment, it's because the company is farther down the road and already proven its ability to execute, like Blue Medora."

Indeed, DeVos said, Start Garden is open to all sorts of business ideas, as well as to anyone anywhere to apply.

When Start Garden exhausts its $15 million fund over the next two years, DeVos said, he hopes to have a nice portfolio of companies. Perhaps some will be moving toward exits. Many, he hopes, will have good stories to tell.

"It would be a validation of what we're doing," he said. "And we'd be happy with it.

"We might set up another fund, but we've only been doing this for less than a year, so there's still a lot more to learn."